In
The Big Short Michael Lewis traces the lead up to the global finance crash by charting how a handful of people saw the crash coming and made a fortune betting on it happening. Lewis has an engaging writing style and uses both personal narrative and a focus on key individuals to draw the reader in and ground and localise what was a complex and somewhat opaque historical event. He succeeds very well in this regard and the book provides a compelling genealogy of the years immediately before the crash and some interesting insights into the psychology and internal politics and rivalries of Wall Street traders. For me, however, the book fell a little short. By pursuing a personal story narrative, Lewis tends to ignore the wider contextualisation of the crash - the politics and political economy of finance, especially in the US; the financialization of Western society; and the organization, globalization and interdependence of the finance system. More broadly, the economics and sociology of finance - on Wall Street, on Main Street, and on Acacia Avenue – is lacking; how and why property bubbles form and the pattern and logic of investments made. Moreover, the book is implicit in its moralising, failing in many ways to castigate all involved, including those that were shorting the system – they are held up and admired for their foresight in getting rich at the banks’ expense as they collapsed and were rescued. Rather than trying to stop the madness and heading off the impending crash by publicising their knowledge and going to the authorities, they bet on the crash happening even though they knew what the likely consequences of a crash would be, and they actively encouraged some of the madness by creating a new market for such bets (but they’d be wildly rich, so what did it matter?). Nor is there enough reflection on normative questions on how the system should be reconfigured and run; rather Lewis reveals some of the shortcomings, but leaves it to others to think about what should change. That said,
The Big Short is a very engaging and compelling read, even if it does leave you shaking your head in frustration at the madness, arrogance and greed of Wall Street banks and the people who run them.
In The Big Short Michael Lewis traces the lead up to the global finance crash by charting how a handful of people saw the crash coming and made a fortune betting on it happening. Lewis has an engaging writing style and uses both personal narrative and a focus on key individuals to draw the reader in and ground and localise what was a complex and somewhat opaque historical event. He succeeds very well in this regard and the book provides a compelling genealogy of the years immediately before the crash and some interesting insights into the psychology and internal politics and rivalries of Wall Street traders. For me, however, the book fell a little short. By pursuing a personal story narrative, Lewis tends to ignore the wider contextualisation of the crash - the politics and political economy of finance, especially in the US; the financialization of Western society; and the organization, globalization and interdependence of the finance system. More broadly, the economics and sociology of finance - on Wall Street, on Main Street, and on Acacia Avenue – is lacking; how and why property bubbles form and the pattern and logic of investments made. Moreover, the book is implicit in its moralising, failing in many ways to castigate all involved, including those that were shorting the system – they are held up and admired for their foresight in getting rich at the banks’ expense as they collapsed and were rescued. Rather than trying to stop the madness and heading off the impending crash by publicising their knowledge and going to the authorities, they bet on the crash happening even though they knew what the likely consequences of a crash would be, and they actively encouraged some of the madness by creating a new market for such bets (but they’d be wildly rich, so what did it matter?). Nor is there enough reflection on normative questions on how the system should be reconfigured and run; rather Lewis reveals some of the shortcomings, but leaves it to others to think about what should change. That said, The Big Short is a very engaging and compelling read, even if it does leave you shaking your head in frustration at the madness, arrogance and greed of Wall Street banks and the people who run them.
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